Hi! We thought we'd challenge ourselves for today's send by exclusively covering companies with an "X" in their name that aren't owned by Elon Musk. Surprisingly difficult. We're exploring: |
- Perplexity: Apple's top brass have held talks about buying the AI startup.
- FedEx: Fred Smith, the delivery giant's pioneering founder, died on Saturday.
- Pixar: The storied animation studio's latest effort "Elio" is off to a rough start.
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Apple is behind in AI — maybe it can buy its way to the top? |
Apple hasn't taken AI as seriously as some of its peers, and now, it seems that the company's top brass are considering writing a very large check to catch up in the space. Though the company is yet to formally discuss a deal with Perplexity, some of Apple's key decision-makers, including Head of mergers and acquisitions Adrian Perica and Services chief Eddy Cue, have reportedly held internal discussions about making a bid for search engine startup Perplexity AI, according to Bloomberg News on Friday. The consideration comes as the tech giant awaits the final ruling in Google's antitrust trial, which will decide if Apple's long-standing search partnership with the platform — revealed to be worth $20 billion in 2022 — will be allowed to continue in any form. |
Following a recent series of Apple Intelligence failures and delays in Siri upgrades, the company is clearly keen to explore all options on the table, and Perplexity, which received 780 million queries in May, is growing at light speed (it's also racking up lawsuits at a pretty remarkable clip). But any potential deal would represent a major change to Apple's M&A strategy. Unlike some of its more acquisitive peers like Alphabet, Apple has typically preferred to make smaller acquisitions and grow products and teams organically. The company has made only three publicly reported transactions worth more than a billion dollars in its history. With Perplexity recently completing a funding round that valued it at $14 billion — a figure that would likely only be a floor for any price negotiations — Apple would have to be willing to splurge. Of course, if any company can afford it, it's Apple: the iPhone maker spent nearly $50 billion buying back its own stock over the past two quarters. |
Fred Smith, the founder of FedEx who helmed the company through decades of growth, died on Saturday |
The 80-year-old pioneer of modern delivery was the "heart and soul" of the business, according to CEO Raj Subramaniam in a message to staff over the weekend. Smith, a Marine Corps veteran who laid out the idea for FedEx as a Yale student in a paper that scored him a C, was integral in forging the company into the industry titan we see today, with more than 500,000 employees on the payroll and ~$90 billion worth of revenue each year. |
FedEx's early years were notoriously shaky. Hampered by mounting debts and coming off the back of another loan rejection in the mid-1970s, Smith reportedly took the company's last $5,000 to a blackjack table in Las Vegas and turned it into $27,000 — enough to keep FedEx above water. In the five decades since, though, the business has boomed, with more than $1.2 trillion in cumulative revenue since 2000 and a streak of positive annual profits going back to 1992. The last two years have been tougher, however, partly because the e-commerce pandemic boom has faded, but also due to stiffer competition. While Smith foresaw many hurdles in the early years of building FedEx into a logistics behemoth, a giant tech company with almost infinitely deep pockets probably wasn't one of them, and Amazon's efforts in the delivery space have only intensified in the last decade. Still, FedEx remains the world's biggest express transportation company, making deliveries in over 220 countries around the globe. Not bad for a business that the founder dreamt up as a student ~60 years ago. |
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"Elio" marked Pixar's worst opening weekend in its 30-year history |
Over the weekend, Disney's Pixar aimed for the stars with the release of new intergalactic tale "Elio"… and fell back to earth when the $150M-budgeted film only took $21M at the domestic box office, the worst debut ever for Pixar. Telling the story of a space-obsessed middle-schooler who gets abducted by a friendly alien, the new Pixar movie slumped behind rival Dreamworks' live-action remake of the smash hit "How To Train Your Dragon," which accrued $37M in its second weekend after a whopping $85M opening, as well as zombie sequel "28 Years Later," which took $30M in North America, per Variety. The weekend's triptych reflects the waning public appetite for original content in favor of more familiar IP. However, just looking at Pixar itself — lionized since the 1990s for its groundbreaking computer animation techniques and original heart-warming flicks like "Toy Story" and "Inside Out" — it seems that the iconic production studio is losing its magic touch for making blockbusters based on unique (often anthropomorphic) worlds. |
To originality… and beyond |
Although "Elio" was critically well-received, garnering an impressive 84% score on Rotten Tomatoes, it's not yet translated to ticket sales — increasingly the case for Pixar's original content, like "Elemental" and "Onward," but not necessarily for movies that build on the studio's existing franchises. Data from The Numbers shows that sequels have dominated Pixar's box office takings across opening weekends in recent years, with "Incredibles 2" (2018) and "Inside Out 2" (2024) ranking amongst the biggest domestic debuts of all time. Parent company Disney has seen profits driven by family-friendly sequels like "Moana 2," as well as from its ability to pull on existing threads in its wildly successful Marvel franchise. In October last year, CNBC reported that up to 70% of the movies from the six major studios would be related to existing IP in 2025. Now, with the disparity in box office takings looking starker than ever, Pixar's original content might fall even further out of focus. |
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- Fin: Roughly 55% of US movie exhibition execs now think that the "traditional cinema experience" has less than 20 years left as a viable business model.
- There's an 18-point partisan split between the oldest and youngest members of America's Gen Z, according to recent Yale polling.
- New York is set to build the first major US nuclear power plant in more than 15 years.
- Surcharge: Uber drivers are now more concerned about charging access than the actual cost of electric vehicles.
- Telehealth company Hims & Hers could be on for its biggest single-day drop in history, with shares down more than 25% on news that Novo Nordisk will stop partnering with the business.
- Tesla's long-awaited robotaxi finally hit the roads yesterday — check out the launch by the numbers.
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| Off the charts: Locals in which European city are protesting ahead of the planned nuptials of Jeff Bezos and Lauren Sánchez later this week? [Answer below]. |
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